What is an Economic Man
Economic man refers to an idealized human being who acts rationally and with complete knowledge, who seeks to maximize personal utility or satisfaction. Economic man is an assumption of many economic models, and is also known as homo economicus.
BREAKING DOWN Economic Man
To explain a phenomenon, scientists often build models, and to build a model, scientists have to make assumptions that simplify reality. In economics, one of those simplifying assumptions is economic man. Unlike a real human, economic man always behaves rationally in a narrowly self-interested way that maximizes his or her satisfaction. This assumption enables economists to study how markets would work if populated by these theoretical persons. For example, it is often assumed that demand for a product is a linear function of price. While this may sometimes be the case with certain goods, it is not reflective of the actual consumer environment.
Economists are aware of the deficiencies of using economic man, though some are more willing to abandon the concept than others. One obvious problem is that human beings don't always act "rationally," that is, in their narrow economic self-interest. The economic man concept also assumes that the options faced by economic man offer obvious differences in satisfaction. But it is not always clear that one option is superior to another. Two options may enhance a person's utility, or satisfaction, in two different ways, and it may not be clear that one is better than the other.